Nine reasons why India's WTO veto shocked the world
(Reuters) - India's tough diplomacy blocked a landmark world trade treaty late on Thursday, despite last-ditch talks to rescue what would have been the first global trade reform since the creation of the World Trade Organization 19 years ago.
Trade diplomats in Geneva have said they are "flabbergasted", "astonished" and "dismayed" and described India's position as "hostage-taking" and "suicidal". Here are nine reasons why they say India's stance made no sense.
1. India has been a vocal backer of world trade reform. It has criticised the small clubs of countries, led by the United States and European Union, that lost patience with the slow pace of global reforms and started to discuss faster liberalising of trade in certain areas, such as services and information technology products. India is not in any of these groups. But Thursday's veto is likely to give them even more momentum as hope of a global trade pact, long in doubt, appears to be over.
2. India's veto may be the beginning of the end for the WTO. Trade experts say that if the WTO's 20-year-old rulebook does not evolve, more and more trade will be governed by new regional agreements such as the Trans-Pacific Partnership, which will have their own rules and systems of resolving disputes. That could lead to a fragmented world of separate trade blocs.
3. India's new government was widely seen as being pro-business. And yet it blocked a deal on "trade facilitation", a worldwide streamlining of customs rules that would cut container handling times, guarantee standard procedures for getting goods to and from their destinations and kill off vast amounts of paperwork at borders around the world. Some estimates said it would add $1 trillion to the world economy as well as 21 million jobs, 18 million of them in developing countries.
4. Nobody else was negotiating. Thursday's meeting was simply supposed to formally adopt the final trade negotiation text into the WTO rulebook, following its agreement by ministers at a meeting in Bali last December. India's then Trade Minister Anand Sharma hailed the Bali deal as a landmark in the history of the WTO. "We were able to arrive at a balanced outcome which secures our supreme national interest," Sharma said at the time. India did not hint at any further objection until days before it wielded its veto, and even then it made no concrete demands until the WTO meeting to adopt the new rules was in progress.
5. India did not object to the deal it vetoed. Its objections were unconnected to trade facilitation. It blocked the trade facilitation deal to try to get what it wanted on something else: food security.
6. India had already got what it wanted on food security. At Bali, it forced a big concession from the United States and European Union, which initially strongly opposed its demands, but agreed that India could stockpile food at subsidised prices, reversing the trend of trying to reduce and remove trade-distorting food subsidies globally. The arrangement was temporary, but the WTO agreed to work towards a permanent solution within four years, by the end of 2017.
7. India's demands reversed its previous position. India blocked the trade facilitation deal because it wanted the WTO to move to a permanent solution more quickly than the four-year timeline. But diplomats say that India was offered a two-year timeframe before Bali but it insisted on four.
8. India's veto could put it in legal danger. As part of the Bali deal, India won a pledge that nobody would bring a trade dispute to challenge its food stockpiling programme, which is widely thought to have broken the WTO rules. However, diplomats say that Bali was a "package" of 10 agreements, and the only legally binding part was trade facilitation. If that fails, the package unravels, and India may lose its protection.
9. India was isolated. Cuba, Venezuela and Bolivia voiced support, but diplomats say other big developing countries such as Russia, China and Brazil, as well as India's neighbour Pakistan, were among the chief opponents of its veto. Poorer countries stand to lose most, WTO chief Roberto Azevedo told the WTO meeting after the deal collapsed. "They’re the ones with fewer options, who are at risk of being left behind. They’re the ones that may no longer have a seat at the table."
(Reporting by Tom Miles; Editing by Clarence Fernandez)
Nine reasons why India's WTO veto shocked the world| Reuters
Kerry meets Jaitley, discusses WTO impasse
US Secretary of State John Kerry on Thursday met Union Finance Minister Arun Jaitley and discussed India’s stance on the ongoing WTO’s Trade Facilitation Agreement talks which are set to conclude at Geneva later in the day.
Mr. Kerry was accompanied by U.S. Commerce Secretary Penny Pritzker who has already expressed disappointment over India’s stand at the ongoing TFA negotiations for easing customs rule for free movement of goods.
“We had a good discussion. India is a big market. We also had discussion on issues related to WTO,” an official privy to the meeting said.
India has been maintaining that it will not ratify the TFA, which is dear to the developed world, until a permanent solution is found on the issue of public stock holding for food security purposes.
The TFA, which aims at simplifying customs procedure, increasing transparency and reducing transactions cost, is being pushed by the U.S. and others as they seek to bolster their sagging economies through an unhindered international trade by way of uniform and easy procedures at customs.
India is seeking a guarantee on food security for its hundreds of millions of poor as a pre-condition for the passage of the pact.
The agreement, drafted during a ministerial at the Indonesian resort town of Bali last December, has to be sealed by July 31.
On Wednesday, Ms. Pritzker said she was “hopeful that even in the last remaining days India might find a way to come to a solution on this issue”.
India’s demands block $1 trillion WTO deal on customs rules
By David Brunnstrom and Tom Miles
NEW DELHI/GENEVA (Reuters) – The World Trade Organization failed on Thursday to reach a deal to standardise customs rules, which would have been the first global trade reform in two decades but was blocked by India’s demands for concessions on agricultural stockpiling. “We have not been able to find a solution that would allow us to bridge that gap,” WTO Director-General Roberto Azevedo told trade diplomats in Geneva just two hours before the final deadline for a deal.
“Of course it is true that everything remains in play until midnight, but at present there is no workable solution on the table, and I have no indication that one will be forthcoming.”
The deadline passed without a breakthrough. WTO ministers had already agreed the global reform of customs procedures known as “trade facilitation” last December, but it needed to be put into the WTO rule book by July 31.
Most diplomats saw that as rubber-stamping a unique success in the WTO’s 19 year history, which according to some estimates would add $1 trillion (£592.22 billion) and 21 million jobs to the world economy, so they were shocked when India unveiled its veto.
Trade experts say Thursday’s failure is likely to end the era of trying to cobble together global trade agreements and to accelerate efforts by smaller groups of like-minded nations to liberalise trade among themselves. India has been vocal in opposing such moves, making its veto even more surprising.
“Today’s developments suggest that there is little hope for truly global trade talks to take place,” said Jake Colvin at the National Foreign Trade Council, a leading U.S. business group.
“The vast majority of countries who understand the importance of modernising trade rules and keeping their promises will have to pick up the pieces and figure out how to move forward.”
Some nations have already discussed a plan to exclude India from the agreement and push ahead regardless, and the International Chamber of Commerce urged officials to “make it happen.”
“Our message is clear. Get back to the table, save this deal and get the multilateral trade agenda back on the road to completion sooner rather than later,” ICC Secretary General John Danilovich said.
U.S. Secretary of State John Kerry, on a visit to New Delhi, had earlier said he was hopeful that differences between India and much of the rest of the world could be resolved.
But after Azevedo’s speech, U.S. Ambassador to the WTO Michael Punke was downbeat. “We’re obviously sad and disappointed that a very small handful of countries were unwilling to keep their commitments from the December conference in Bali, and we agree with the Director-General that that action has put this institution on very uncertain new ground,” Punke told reporters.
India had insisted that, in exchange for signing the trade facilitation agreement, it must see more progress on a parallel pact giving it more freedom to subsidise and stockpile food grains than is allowed by WTO rules. It got support from Cuba, Venezuela and Bolivia.
India’s new nationalist government has insisted that a permanent agreement on its subsidised food stockpiling must be in place at the same time as the trade facilitation deal, well ahead of a 2017 target set last December in Bali.
Kerry, whose visit to India was aimed at revitalising bilateral ties but was overshadowed by the standoff, said the United States understood India’s position that it needs to provide food security for its poor but India would lose out if it refused to maintained its veto.
DEAL WITHOUT INDIA?
Diplomats say India could technically attract a trade dispute if it caused the deal to collapse, although nobody wanted to threaten legal action at this stage. The summer break will give diplomats time to mull options, including moving ahead without India.
Technical details would still have to be ironed out, but there was a “credible core group” that would be ready to start talking about a such a deal in September, a source involved in the discussions said.
“What began as a murmur has become a much more active discussion in Geneva and I think that there are a lot of members in town right now that have reached the reluctant conclusion that that may be the only way to go,” he said.
An Australian trade official with knowledge of the talks said a group of countries including the United States, European Union, Australia, Japan, Canada and Norway began discussing the possibility in Geneva on Wednesday afternoon.
New Delhi cannot be deliberately excluded, since that would mean other countries slowing down containers destined for India, but if it becomes a “free-rider” it will add another nail in the coffin of attempts to hammer out global trade reform. Trade diplomats had previously said they were reluctant to consider the idea of the all-but-India option, but momentum behind the trade facilitation pace means it may be hard to stop.
Many countries, including China and Brazil, have already notified the WTO of steps they plan to take to implement the customs accord immediately.
Other nations have begun bringing the rules into domestic law, and the WTO has set up a funding mechanism to assist. But WTO head Azevedo said he feared that while major economies had options open to them, the poorest would be left behind.
“If the system fails to function properly then the smallest nations will be the biggest losers,” he said. “It would be a tragic outcome for those economies — and therefore a tragic outcome for us all.”
@nair @abjktu @Indischer @jarves @wolfschanzze @Oscar @Chak Bamu @INDIC
@acetophenol @gslv mk3 @kurup @seiko @sandy_3126 @scorpionx and all others.
Nine reasons why India's WTO veto shocked the world
(Reuters) - India's tough diplomacy blocked a landmark world trade treaty late on Thursday, despite last-ditch talks to rescue what would have been the first global trade reform since the creation of the World Trade Organization 19 years ago.
Trade diplomats in Geneva have said they are "flabbergasted", "astonished" and "dismayed" and described India's position as "hostage-taking" and "suicidal". Here are nine reasons why they say India's stance made no sense.
1. India has been a vocal backer of world trade reform. It has criticised the small clubs of countries, led by the United States and European Union, that lost patience with the slow pace of global reforms and started to discuss faster liberalising of trade in certain areas, such as services and information technology products. India is not in any of these groups. But Thursday's veto is likely to give them even more momentum as hope of a global trade pact, long in doubt, appears to be over.
2. India's veto may be the beginning of the end for the WTO. Trade experts say that if the WTO's 20-year-old rulebook does not evolve, more and more trade will be governed by new regional agreements such as the Trans-Pacific Partnership, which will have their own rules and systems of resolving disputes. That could lead to a fragmented world of separate trade blocs.
3. India's new government was widely seen as being pro-business. And yet it blocked a deal on "trade facilitation", a worldwide streamlining of customs rules that would cut container handling times, guarantee standard procedures for getting goods to and from their destinations and kill off vast amounts of paperwork at borders around the world. Some estimates said it would add $1 trillion to the world economy as well as 21 million jobs, 18 million of them in developing countries.
4. Nobody else was negotiating. Thursday's meeting was simply supposed to formally adopt the final trade negotiation text into the WTO rulebook, following its agreement by ministers at a meeting in Bali last December. India's then Trade Minister Anand Sharma hailed the Bali deal as a landmark in the history of the WTO. "We were able to arrive at a balanced outcome which secures our supreme national interest," Sharma said at the time. India did not hint at any further objection until days before it wielded its veto, and even then it made no concrete demands until the WTO meeting to adopt the new rules was in progress.
5. India did not object to the deal it vetoed. Its objections were unconnected to trade facilitation. It blocked the trade facilitation deal to try to get what it wanted on something else: food security.
6. India had already got what it wanted on food security. At Bali, it forced a big concession from the United States and European Union, which initially strongly opposed its demands, but agreed that India could stockpile food at subsidised prices, reversing the trend of trying to reduce and remove trade-distorting food subsidies globally. The arrangement was temporary, but the WTO agreed to work towards a permanent solution within four years, by the end of 2017.
7. India's demands reversed its previous position. India blocked the trade facilitation deal because it wanted the WTO to move to a permanent solution more quickly than the four-year timeline. But diplomats say that India was offered a two-year timeframe before Bali but it insisted on four.
8. India's veto could put it in legal danger. As part of the Bali deal, India won a pledge that nobody would bring a trade dispute to challenge its food stockpiling programme, which is widely thought to have broken the WTO rules. However, diplomats say that Bali was a "package" of 10 agreements, and the only legally binding part was trade facilitation. If that fails, the package unravels, and India may lose its protection.
9. India was isolated. Cuba, Venezuela and Bolivia voiced support, but diplomats say other big developing countries such as Russia, China and Brazil, as well as India's neighbour Pakistan, were among the chief opponents of its veto. Poorer countries stand to lose most, WTO chief Roberto Azevedo told the WTO meeting after the deal collapsed. "They’re the ones with fewer options, who are at risk of being left behind. They’re the ones that may no longer have a seat at the table."
(Reporting by Tom Miles; Editing by Clarence Fernandez)
Nine reasons why India's WTO veto shocked the world| Reuters
Kerry meets Jaitley, discusses WTO impasse
US Secretary of State John Kerry on Thursday met Union Finance Minister Arun Jaitley and discussed India’s stance on the ongoing WTO’s Trade Facilitation Agreement talks which are set to conclude at Geneva later in the day.
Mr. Kerry was accompanied by U.S. Commerce Secretary Penny Pritzker who has already expressed disappointment over India’s stand at the ongoing TFA negotiations for easing customs rule for free movement of goods.
“We had a good discussion. India is a big market. We also had discussion on issues related to WTO,” an official privy to the meeting said.
India has been maintaining that it will not ratify the TFA, which is dear to the developed world, until a permanent solution is found on the issue of public stock holding for food security purposes.
The TFA, which aims at simplifying customs procedure, increasing transparency and reducing transactions cost, is being pushed by the U.S. and others as they seek to bolster their sagging economies through an unhindered international trade by way of uniform and easy procedures at customs.
India is seeking a guarantee on food security for its hundreds of millions of poor as a pre-condition for the passage of the pact.
The agreement, drafted during a ministerial at the Indonesian resort town of Bali last December, has to be sealed by July 31.
On Wednesday, Ms. Pritzker said she was “hopeful that even in the last remaining days India might find a way to come to a solution on this issue”.
India’s demands block $1 trillion WTO deal on customs rules
By David Brunnstrom and Tom Miles
NEW DELHI/GENEVA (Reuters) – The World Trade Organization failed on Thursday to reach a deal to standardise customs rules, which would have been the first global trade reform in two decades but was blocked by India’s demands for concessions on agricultural stockpiling. “We have not been able to find a solution that would allow us to bridge that gap,” WTO Director-General Roberto Azevedo told trade diplomats in Geneva just two hours before the final deadline for a deal.
“Of course it is true that everything remains in play until midnight, but at present there is no workable solution on the table, and I have no indication that one will be forthcoming.”
The deadline passed without a breakthrough. WTO ministers had already agreed the global reform of customs procedures known as “trade facilitation” last December, but it needed to be put into the WTO rule book by July 31.
Most diplomats saw that as rubber-stamping a unique success in the WTO’s 19 year history, which according to some estimates would add $1 trillion (£592.22 billion) and 21 million jobs to the world economy, so they were shocked when India unveiled its veto.
Trade experts say Thursday’s failure is likely to end the era of trying to cobble together global trade agreements and to accelerate efforts by smaller groups of like-minded nations to liberalise trade among themselves. India has been vocal in opposing such moves, making its veto even more surprising.
“Today’s developments suggest that there is little hope for truly global trade talks to take place,” said Jake Colvin at the National Foreign Trade Council, a leading U.S. business group.
“The vast majority of countries who understand the importance of modernising trade rules and keeping their promises will have to pick up the pieces and figure out how to move forward.”
Some nations have already discussed a plan to exclude India from the agreement and push ahead regardless, and the International Chamber of Commerce urged officials to “make it happen.”
“Our message is clear. Get back to the table, save this deal and get the multilateral trade agenda back on the road to completion sooner rather than later,” ICC Secretary General John Danilovich said.
U.S. Secretary of State John Kerry, on a visit to New Delhi, had earlier said he was hopeful that differences between India and much of the rest of the world could be resolved.
But after Azevedo’s speech, U.S. Ambassador to the WTO Michael Punke was downbeat. “We’re obviously sad and disappointed that a very small handful of countries were unwilling to keep their commitments from the December conference in Bali, and we agree with the Director-General that that action has put this institution on very uncertain new ground,” Punke told reporters.
India had insisted that, in exchange for signing the trade facilitation agreement, it must see more progress on a parallel pact giving it more freedom to subsidise and stockpile food grains than is allowed by WTO rules. It got support from Cuba, Venezuela and Bolivia.
India’s new nationalist government has insisted that a permanent agreement on its subsidised food stockpiling must be in place at the same time as the trade facilitation deal, well ahead of a 2017 target set last December in Bali.
Kerry, whose visit to India was aimed at revitalising bilateral ties but was overshadowed by the standoff, said the United States understood India’s position that it needs to provide food security for its poor but India would lose out if it refused to maintained its veto.
DEAL WITHOUT INDIA?
Diplomats say India could technically attract a trade dispute if it caused the deal to collapse, although nobody wanted to threaten legal action at this stage. The summer break will give diplomats time to mull options, including moving ahead without India.
Technical details would still have to be ironed out, but there was a “credible core group” that would be ready to start talking about a such a deal in September, a source involved in the discussions said.
“What began as a murmur has become a much more active discussion in Geneva and I think that there are a lot of members in town right now that have reached the reluctant conclusion that that may be the only way to go,” he said.
An Australian trade official with knowledge of the talks said a group of countries including the United States, European Union, Australia, Japan, Canada and Norway began discussing the possibility in Geneva on Wednesday afternoon.
New Delhi cannot be deliberately excluded, since that would mean other countries slowing down containers destined for India, but if it becomes a “free-rider” it will add another nail in the coffin of attempts to hammer out global trade reform. Trade diplomats had previously said they were reluctant to consider the idea of the all-but-India option, but momentum behind the trade facilitation pace means it may be hard to stop.
Many countries, including China and Brazil, have already notified the WTO of steps they plan to take to implement the customs accord immediately.
Other nations have begun bringing the rules into domestic law, and the WTO has set up a funding mechanism to assist. But WTO head Azevedo said he feared that while major economies had options open to them, the poorest would be left behind.
“If the system fails to function properly then the smallest nations will be the biggest losers,” he said. “It would be a tragic outcome for those economies — and therefore a tragic outcome for us all.”
@nair @abjktu @Indischer @jarves @wolfschanzze @Oscar @Chak Bamu @INDIC
@acetophenol @gslv mk3 @kurup @seiko @sandy_3126 @scorpionx and all others.
Nine reasons why India's WTO veto shocked the world
